Charitable Giving Information

Tax Planning Letter

Question: Is contribution to a Roth IRA for tax year 2008 tax deductible?

While filing out the tax form I noticed that for explanation for Line 51 (Retirement Savings Contributions Credit (Saver’s Credit) on Form 1040 says “you may be able to take this credit if you or your spouse if filing jointly, make a) contributions to a traditional or Roth IRA

This is the part where I got confused. I thought that Roth IRA is not tax deductible but under letter “a” it says “traditional” OR Roth, which makes me wonder if the rule changed for tax year 2008 (one of Obama’s plans)?

Can someone explain this to me? Thanks!

Answer: The Roth is not tax deductible.

The Retirement Savings Contributions Credit (Saver's Credit) is a separate credit, if you qualify, that is not connected to the deductiblity of your IRA, 401(k), 403(b), etc.

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Donate Clothing Washington Dc

Question: where can I donate stuff to be given away in DC?

I want to give away old, but in good condition clothes, coats, some household items, etc. to people in need and I don’t know where to go to do that. I prefer for them to be given away and not sold. I live in Washington DC, and I can possibly drop it of, if they will pick it up that would be even better.

Answer: Salvation Army

Shelters

Churches like LDS collect items for people who needs it.

5 minutes can make a difference

Catholic Charities Adoptions

Question: how would i go about finding my son his birth date is november 18 1963 and he was adopted by catholic chariti

he was born in sacred heart hospital in manchester new hampshire on nov. 18 1963 the mothers name is sandra m williams catholic charities was the adoption agency at the time she had named him john fredrick he weighed 8 pounds 6 qz and was 23 inches long would u please help us try to find him for his mother would very much like to contact him or get any information that you may be able to help us this is a plea for them to come together i would appreciate any help that you could give thank you very much. the parents name of sandra williams at the time is fredrick arthur williams and mildred francis williams address was at that time was 46 old falls road manchester nh the person handling the adoption at that time was mrs foy

Answer: Best thing to do, is to go to the website that they have, and contact them directly. Put in your request to give all information to them about birth mother, whereabouts, phone number, etc., and if the child has a desire to find out, they will give him the information. They will NOT contact him with this unless he wants to know and gets in touch with them. This is to protect him. I am adopted, and knew of my birth mother from day one, so my case is different. I can only pray he's asked, and they've kept track of him so when you finally give them the information, they will forward it to him. They do have reunion and contact services....so that's a plus and a VERY good sign! I wish you the best!

Listed below, links to help, the first being the contact info for Catholic Charities, including an email address.

Catholic Charities North Dakota - Pregnancy, Parenting and Adoption

Charitable Giving Limits

Question: Do Obama and the Democrats want to limit deductions for charities because they don’t give anyway?

http://www.nytimes.com/2009/02/27/us/27charity.html?_r=1
Wealthy donors and the nonprofit groups they support were in an uproar over the Obama administration’s proposal to limit the value of deductions for charitable gifts, which was included in the budget the president presented to Congress.

http://www.huffingtonpost.com/2008/03/25/obama-gave-only-1-of-inc_n_93376.html

Democratic presidential candidate Barack Obama and his wife Michelle gave $10,772 of the $1.2 million they earned from 2000 through 2004 to charities, or less than 1 percent, according to tax returns for those years released today by his campaign.

Answer: I think that this is a back door assault on religious charities and they believe that it will cause less of a stir than directly taxing the organizations themselves.

Tax Shelters in Canada 6 - Limits to charitable donations

Estate Tax Planning 2009

Question: Real Estate Tax advice.. very detailed ..any experts in real estate tax out there?

We are selling our principal residence in South Carolina which we will have lived in and owned for about 18 months (thus short of the 2 year mandatory minimum for tax free status).

We will have tens of thousands of dollars in capital improvements (new hardwood flooring, counters, siding, deck, extensive bathroom renovation..done in 2009). We also have lots of money in repairs and painting, cleaning, yard maintenance etc.

We will hopefully sell in spring 2010.

1. We plan to make about 80k over what we bought it for.. can we deduct any of what we spent fixing it up?
2. Will we get taxed on every dollar over what we originally paid in 2008? There are no extenuating circumstances to force the move.
3. Can we deduct our closing costs from originally purchasing it?
4. Is there anything else you can tell me that might help..ie. things I CAN deduct to help me avoid some of the profit tax?

Thanks and Happy New Year!

K

Answer: 1. We plan to make about 80k over what we bought it for.. can we deduct any of what we spent fixing it up?

Add the costs of improvements, but not maintenance and repairs, to the purchase price of the house. Also, add the real estate commission you pay to sell the house to the purchase price of the house. The total of these amounts is included in the "basis" of the house (see also 3 for other additions to the basis). Only the difference between the selling price and the basis of the house is subject to income tax.

2. Will we get taxed on every dollar over what we originally paid in 2008? There are no extenuating circumstances to force the move.

No. You may be subject to tax only on the difference between the selling price and the basis of the house. Since you have owned the house for 18 months, your gain is long-term capital gain and is going to be taxed at a maximum of 15%.

3. Can we deduct our closing costs from originally purchasing it?

You can add the cost of the survey, deed recording fee, title insurance, and other expenses which are related to the purchase of the property to your basis. You cannot add any fees related to the mortgage, such as the mortgage origination fee.

4. Is there anything else you can tell me that might help..ie. things I CAN deduct to help me avoid some of the profit tax?

In the year of sale, if you have not deducted all of the points (also known as origination fees), you may deduct them on Schedule A.

Best advice is to seek out an experienced professional who can go into the details as mentioned above. It will be money well spent and can save you a lot in taxes.

Business Valuations for Gift and Estate Tax Planning: What Financial Planning Professionals Need ...